The International Monetary Fund (IMF) stated that an increasing number of countries experienced debt distress in 2022. This was conveyed in the IMF's report, *Crisis Upon Crisis*, released in September 2022.
The IMF explained that debt distress is a condition where a country is unable to repay its debts, thus requiring restructuring or specific relief policies from lenders.
Countries experiencing this condition potentially lose market access and suffer higher debt servicing burdens, ultimately harming economic growth and investment in their regions.
According to the IMF report, in 2022, approximately 13% of low-income countries experienced debt distress. Some examples of countries in this group include Mozambique, Sudan, Zimbabwe, Somalia, and the Republic of Congo.
The IMF also noted that the proportion of low-income countries experiencing debt distress has been steadily increasing over the past 10 years, reaching its highest level in 2022, as shown in the graph.
"Governments in various countries are currently struggling to cope with rising import commodity prices and debt bills amid uncertainty due to high inflation and slowing growth," the IMF explained in its report.
"As monetary policy is tightened to curb inflation, countries' debt costs will rise, narrowing the scope of government spending and increasing debt vulnerability, especially in developing economies," it continued.
According to the IMF's Low-Income Countries Debt Sustainability Analysis (LIC DSA) data, up to August 2022, no Southeast Asian countries had experienced debt distress. However, several neighboring countries were recorded as being at *risk* of experiencing such a condition, namely Cambodia, Myanmar, Laos, and Timor-Leste.